COP 27 Promises Loss and Damage Fund, But No Actions
The 27th session of the Conference of the Parties of the United Nations Framework Convention on Climate Change (UNFCCC), commonly known as COP 27, concluded at Sharm El Sheikh in Egypt on 20 November, almost 40 hours late than scheduled, after parties signed a "historic" deal to establish a "loss and damage" fund. This fund will provide financial assistance to developing, vulnerable, small, and island nations adversely affected by extreme weather events due to climate change. Practical steps to utilise the loss and damage fund, however, were not laid down at COP27.
Scientists define loss and damage as the economic and non-economic costs of adverse climate events. Economic effects include loss of income and physical assets like agriculture, business, infrastructure, and property. Non-economic losses include loss of life, health, biodiversity, culture, and indigenous knowledge. Loss and damage events cannot be prevented by mitigation (reducing carbon and other greenhouse gas emissions) or adaptation (preparing for climate change through infrastructural and other adaptations).
Drawbacks of the current framework
The UNFCCC is yet to define loss and damage formally. The current framework neither assigns liability nor mandates compensation to polluting nations. The US has already said that it will not accept legal structures for loss and damage. It is also ambiguous who will receive the fund – which country and why. A method to identify and isolate the effect of climate disasters on nations is yet to be developed. Rehabilitation of refugees and internally displaced people has also not been addressed. These questions, which are essential to make the fund functional, are left to a "transitional committee", which will provide recommendations for the practical adoption of the fund at the next COP.
Countries from the global south argue that developed nations must contribute to the fund because, historically, they have contributed more to carbon emissions. The slow adoption of mitigation and adaptation measures have not been helpful in addressing the climate crisis. Scientists at COP 27 say there is not much time left: the world is slow in adopting previous climate change mitigation initiatives.
The G7, parallely, made an insurance facility to mitigate the loss suffered by vulnerable countries called the Global Shield Against Climate Risks initiative. Voluntary contributions under the initiative by a few nations like Germany, Austria and the EU are in the millions. The recent Pakistan flood alone is estimated to have caused an economic loss of $30 billion.
As this fund remains outside of the UNFCCC's purview, it can be considered an attempt to control loss and damage finance—exonerating polluters from paying through its opaque functioning. Unless a legally binding target is set for contributions, scientists fear that the global north will continue to find a way around the loss and damage fund by contributing to such insurance facilities or publicity stunts.
Climate vulnerable countries still do not have the technical expertise for early warning systems, contingency and evacuation plans etc., to face climate events promised in the previous COPs. The much celebrated approval of the loss and damage fund is far from adoption. COP must take strict steps to ensure its success COP can adopt techniques like a carbon tax, carbon credits, carbon dividends etc., to address the financing problem. Creating financial responsibility is the ideal way forward to mitigate climate change losses. Such actions would also instill a sense of climate justice among people worst affected by climate change. There is no Planet B — the time to take action is now.
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